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Proposed rule for water testing in Colorado limited

An oil well by the Wyndham Hill area in Frederick is one of 49,236 wells in the state, up 31 percent since 2008. (Hyoung Chang, The Denver Post)

Colorado's proposed new rule to protect water from expanding oil and gas operations would not apply to more than 25 percent of wells or to the tanks, pipelines and other production facilities that are frequent sources of leaks.

Environmental groups that worked with Shell Oil to develop a tougher before-and-after groundwater-testing rule are calling the state's proposal a farce.

Colorado's water sampling "would be the worst in the nation adopted thus far," said Dan Grossman, regional director for the Environmental Defense Fund and a former state lawmaker.

Beyond major exemptions, it allows the industry "to cherry-pick water sources for sampling," Grossman said.

Drilling hotbeds near communities in Weld, Boulder and Larimer counties need "at least as much scrutiny of impacts as the rest of the state, not less," he said.

"At a time when the administration sorely needs to quell the outrage over fracking, this proposal will serve only to stoke the flames," Grossman said.

But oil and gas companies contend that even the state rule goes too far.

This week, the Colorado Oil and Gas Conservation Commission, charged with promoting the industry and simultaneously protecting Colorado's environment, is set to vote on the new water rule along with restrictions on drilling within 500 feet of homes.

COGCC staffers say they designed the water-sampling requirement to ensure that data exist to measure industry impact and to reassure increasingly restive communities.

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However, adoption of the rule as currently proposed would mean that sampling would be less rigorous in the Wattenberg Field drilling zones north of metro Denver, where 17,844 wells exist near communities and companies plan to drill thousands more.

It would mean water samples are not taken at facilities where, according to state data, companies have reported hundreds of spills each year since 2008 — about 17 percent of these contaminating groundwater with petroleum material, including cancer-causing benzene.

For example, a spill was discovered recently by a state inspector in La Plata County — a leak of glycol from a ruptured hose at a gas compressor, which Maralex Resources Inc. covered with gravel.

Unless such spills are near wellheads — in the Maralex case, wells were close — state regulators would lack before-and-after data that could be used to assess damage to try to hold companies accountable.

La Plata County authorities made this point, citing the Maralex case, in a letter to state regulators about their proposed water rule.

44,000 jobs

The COGCC regulators serving under Gov. John Hickenlooper unveiled their proposed rules Dec. 31 after a year of discussions.

For Colorado, oil and gas drilling brings nearly 44,000 jobs, annual severance-tax revenues that reached $207.7 million last year, and state land- board lease revenues of $146 million in 2012, up from $108 million the year before.

Hickenlooper has called for a single, consistent set of state rules so that companies do not face a mishmash of local regulations that could drive them to other states. State attorneys are suing Longmont to nullify the city's drilling regulations.

Yet the COGCC's proposed water-sampling rule focuses narrowly on deep well-bore casings, where few spills are documented. The spills harming groundwater typically are discovered by oil and gas crews working on storage tanks and pipelines.

If the COGCC adopts a weak rule, state lawmakers could step in to beef up environmental safeguards.

Some companies oppose mandatory testing at all drilling sites, let alone at production facilities.

"To do it for every well in the state, that is a huge waste of money," said Mickey O'Hare, president of Maralex, an Ignacio-based company that runs 150 to 200 wells in western Colorado.

State regulators "are cracking down everywhere they can, trying to make us find other places to do business, evidently," O'Hare said. Maralex recently drilled in Kansas, where the regulatory climate "is much easier than in Colorado."

O'Hare says Colorado regulators who recently issued Maralex a notice of alleged violation for spilling glycol and hydrocarbons are bullying his company.

They sampled contaminated soil beneath gravel at a depth of 2 inches, not the required 6 inches, he said. The total amount sprayed from the hose was less than five barrels, which O'Hare said means he did not need to report the spill to the state.

Front Range local governments face demands from residents, such as Boulder County Citizens for Community Rights, to ban drilling.

State regulators' new rules requiring slightly bigger buffer zones and before-and-after groundwater sampling "are worthless," said Audy Leggere-Hickey, a director of that group. "They really do not address the situation at hand or the health concerns.

"The only thing that would meet residents' concerns is a ban" or a moratorium while an independent, peer-reviewed health-impacts study is done, she said.

He defended the proposed water rule, challenging groups' assertions that drilling hotbeds north of Denver are "exempted" — because a different sampling program using existing wells would provide data. He noted that Weld County authorities, unlike counterparts in other counties, do not favor a more-rigorous water-sampling requirement.

Oil and gas spills at tanks, pipelines and other production facilities usually can be detected by state inspectors, who already have a process for holding companies accountable, Lepore said. (The COGCC has 16 inspectors. Colorado has about 49,236 wells, up 31 percent since 2008.)

"I'm sure there will be citizens who will think we should have done more," Lepore said. "There will probably be local governments that think the same thing. We think our existing rules provide a great deal of protection and that our new rules will add a new layer of protection."

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